Seven years into Reagan’s presidency, states and localities were fending for themselves in unprecedented and imaginative ways. After decades of taking a back seat to Washington, state and local governments were invigorated. They raised taxes -- state tax collections rose by a third between 1983 and 1986 -- and enacted a wave of reforms to such institutions as public schools and welfare departments. Partisanship declined sharply, and several state legislatures gave local jurisdictions more authority, scrapping unpopular rules and regulations that had strained state and local relations. Governing predicted a future in which the federal government would build its programs around the innovations of states and localities. Over the next two decades, that's just what happened.
Now, 24 years later, the same process of "devolution" is taking place again -- but this time it's the states that are attempting to shift power and responsibility to cities and counties. It is too early to know if this effort will result in the same creativity and innovation seen in the 1980s and '90s. But as localities shoulder more and more of the burden of making government work efficiently, cities may take on a greater role as the true laboratories of democracy.
Read the 1987 article, "The New Federalism," at governing.com/federalism
